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Financial Year Ended 30 June 2015
Grant King, Managing Director
Karen Moses, Executive Director, Finance and Strategy
20 August 2015
2015 FULL YEAR RESULTS ANNOUNCEMENT
Forward looking statements
This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to
possible future events. Such statements are not statements of fact and there can be no certainty of outcome in relation to the matters to which
the statements relate. These forward looking statements involve known and unknown risks, uncertainties, assumptions and other important
factors that could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements.
Those risks, uncertainties, assumptions and other important factors are not all within the control of Origin and cannot be predicted by Origin
and include changes in circumstances or events that may cause objectives to change as well as risks, circumstances and events specific to the
industry, countries and markets in which Origin and its related bodies corporate, joint ventures and associated undertakings operate. They
also include general economic conditions, exchange rates, interest rates, regulatory environments, competitive pressures, selling price, market
demand and conditions in the financial markets which may cause objectives to change or may cause outcomes not to be realised.
None of Origin Energy Limited or any of its respective subsidiaries, affiliates and associated companies (or any of their respective officers,
employees or agents) (the Relevant Persons) makes any representation, assurance or guarantee as to the accuracy or likelihood of fulfilment
of any forward looking statement or any outcomes expressed or implied in any forward looking statements. The forward looking statements in
this report reflect views held only at the date of this report.
Statements about past performance are not necessarily indicative of future performance.
Except as required by applicable law or the ASX Listing Rules, the Relevant Persons disclaim any obligation or undertaking to publicly update
any forward looking statements, whether as a result of new information or future events.
No offer of securities
This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin,
in any jurisdiction.
2
Outline
1.Performance Highlights Grant King
2.Financial Review Karen Moses
3.Operational Review Grant King
4.Prospects Grant King
5.Appendix
3
1. PERFORMANCE HIGHLIGHTS
Grant King, Managing Director
4
Highlights
Underlying EBITDA* $2,149m up from $2,139m `
Underlying Profit1* $682m down 4%
Underlying EPS* 61.7 cps down 5%
Statutory Loss* ($658m) down from $530m
Statutory EPS* (59.5 cps) down from 48.1 cps
Disposals, Dilutions &
Impairments (incl Contact) ($568m) down from $157m
Group OCAT* $1,578m down 23%
Final Dividend Unfranked 25 cps - -
Total Recordable Injury
Frequency Rate 3.8 improved from 5.0
* Refer to Appendix for Glossary.
(1) A breakdown of Items excluded from Underlying Profit is provided on slide 13.
(2) Bloomberg.
Total Shareholder Return2
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
10 Year TSR 1 Year TSR
Origin
S&P ASX100
Brent
0
10
20
30
40
50
0
2
4
6
8
10
FY2012 FY2013 FY2014 FY2015
Exp
osu
re H
ou
rs (m
illio
n)
TR
IFR
Exposure Hours
TRIFR
Total Recordable Injury
Frequency Rate
5
Origin has delivered a solid operational performance and significant progress
on implementation of its 4 key priorities
Increased Natural Gas contribution
Managed margin and customer position
Reduced operating costs and limit capital investments
Negotiated early termination of out of the money Smithfield PPA
Improved customer experience
Expanded solar and energy services offering
APLNG nearing completion with Upstream 97% and Downstream
92% complete
Completed drilling of Yolla 5 and 6, which will increase production
at BassGas
Completed drilling of high deliverability Halladale / Speculant wells
to increase utilisation of Otway plant
Exploration success with Senecio / Waitsia in Perth Basin
Origin increased its shareholding in Energia Andina to 49.9%,
and Energia Andina acquired a 40% interest in the 69 MW
Javiera solar project in Chile’s Atacama Desert
$4.4 billion1 of liquidity
at 30 June 2015
Contact Energy
divestment:
adds $1.4 billion to
liquidity
reduces net debt by
$3.0 billion, from
$13.3 billion to
$10.3 billion2
IMPROVING RETURNS
IN ENERGY MARKETS
DELIVERING GROWTH
IN THE INTEGRATED
GAS BUSINESS
GROWING CAPABILITIES
AND INCREASE INVESTMENT
IN RENEWABLES
CAPITAL
MANAGEMENT
AND FUNDING
1
2
3
4
(1) Excludes Contact Energy and bank guarantees.
(2) 30 June 2015 numbers adjusted for proceeds received on 10 August 2015.
6
Energy Markets is delivering improved margins driven by expanding
Natural Gas margins, ramp gas benefits and commencement of sales to
other LNG projects ...
EBIT / Sales Margin
... combined with operational improvements and enhanced customer experience
(1) Adjusted for a change in Origin’s internal reporting segments.
(2) Adjusted for carbon impact
0%
5%
10%
15%
FY11 FY12 FY13 FY14 FY151 2 2
• Expanded Natural Gas margins as east
coast gas prices rise relative to the cost
of Origin’s gas portfolio
• Increased Natural Gas sales volumes
reflecting Origin’s ability to utilise
Queensland ramp gas and beginning of
sales to other LNG projects
• Cost to serve benefits through improved
operational efficiency and customer
experience
• Invested in new Solar as a Service
offering
• Entered new markets
7
APLNG is nearing completion and expected to achieve sustained LNG
production from Train 1 from Q2 FY2016 with estimated project cost not
expected to be materially different from budget1
Investments in Bass and Otway basins and Ironbark will increase gas production
into growing gas demand in Australia
UPSTREAM 97% COMPLETE DOWNSTREAM 92% COMPLETE
(1) As announced in February 2013, based on December 2012 exchange rates 8
Sale of Contact improves flexibility by reducing net debt by $3 billion and increasing Origin’s available liquidity to $5.8 billion
Why sell Contact?
• Limited growth in NZ electricity demand
• Tiwai closure (~13% of total demand) remains a
future risk. With a significant proportion of NZ energy
generated from renewables, Tiwai closure would
result in minimal demand for thermal generation
• Gearing and credit metrics deteriorate when Contact
increases distributions due to consolidation of
Contact’s net debt while only accessing 53% of
distributions
Why sell Contact now?
• Special dividend proceeds of NZ$0.50 per share, or
NZ$195 million, received in June 2015
• Contact was not trading at a material discount to its
peers
• Exchange rate was favourable compared to prior 5
years
• Short term resolution of Tiwai
Contact share price in A$ and NZD1
P/E multiple based on 30 day VWAP1
9 (1) Bloomberg. Share price adjusted retrospectively for the NZ$0.50 special dividend paid on 23 June 2015.
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
$3.00
$3.50
$4.00
$4.50
$5.00
$5.50
$6.00
$6.50
Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15
A$ share price (LHS)
NZD:AUD (RHS)
0
3
6
9
12
15
18
21
24
27
FY2016 FY2017
Contact Peer 1 Peer 2 Peer 3 Peer 4
2. FINANCIAL REVIEW
Karen Moses, Executive Director, Finance and Strategy
10
2015 Financial Year Highlights
($ million) FY2015 FY2014 Change
Statutory (Loss) / Profit (658) 530 (1,188)
Statutory EPS (59.5 cps) 48.1 cps (107.6 cps)
Underlying Revenue* 13,804 14,518 (714)
Underlying EBITDA* 2,149 2,139 10
Underlying EBIT* 1,280 1,353 (73)
Underlying net financing cost* (169) (192) 23
Underlying income tax expense* (349) (342) (7)
Underlying Profit1 682 713 (31)
Underlying EPS 61.7 cps 64.8 cps (3.1 cps)
Group OCAT 1,578 2,041 (463)
Free Cash Flow* 1,196 1,599 (403)
Capital Expenditure2 1,886 1,012 874
Origin’s Net Cash Contributions to APLNG3 2,166 2,814 (648)
Origin Undrawn Committed Debt Facilities and Cash4 4,377 5,129 (752)
* Refer to Appendix for Glossary.
(1) A breakdown of Items excluded from Underlying Profit is provided on slide 13.
(2) Based on cash flow amounts rather than accrual accounting amounts; includes growth and stay-in-business capital expenditure, capitalised interest and acquisitions.
(3) Via both loan repayments to APLNG and the issue of Mandatorily Redeemable Cumulative Preference Shares (MRCPS) by APLNG to Origin net of MRCPS interest income
(4) Excluding Contact Energy and bank guarantees. 11
Underlying EBITDA up $10 million to $2,149 million Underlying EBIT down $73 million to $1,280 million
Energy Markets EBITDA up $207m:
• Higher Natural Gas margins and sales volumes
E&P EBITDA down $88m:
• Lower liquids production as Energy Markets took
advantage of available ramp gas in QLD, preserving
E&P production for future periods
• Lower liquids prices
Corporate EBITDA down $52m:
• Lower cost recoveries from APLNG under the service
provider agreement
Contact EBITDA down $46m:
• Competition and retail price discounting
($ million) Underlying EBITDA Underlying EBIT
FY2015 FY2014 Change FY2015 FY2014 Change
Energy Markets 1,260 1,053 20% 956 787 21%
E&P 399 487 (18%) 102 210 (51%)
LNG 72 83 (13%) (7) 12 (158%)
Corporate (69) (17) 306% (69) (17) 306%
Total continuing operations 1,662 1,606 3% 982 992 (1%)
Contact Energy 487 533 (9%) 298 361 (17%)
Total 2,149 2,139 0% 1,280 1,353 (5%)
Depreciation & Amortisation up $75m:
• Previous capital investments at Eraring and
Shoalhaven, retail systems in Energy Markets
and completion of Te Mihi and Retail
Transformation in Contact
12
Reconciliation of Statutory Loss to Underlying Profit
FY2015 items are:
• Fair value of financial instruments down primarily due to non-cash impact of Australian Dollar depreciation
• Disposals, dilutions and impairments (non-cash)
• Agreement for early termination of the out of the money Smithfield long term PPA releasing a liability of $135m
• Impairment of upstream assets reflecting reserves revisions, revised development plans and lower oil prices - Cooper (-$180m),
BassGas (-$122m), Otway (-$35m), New Zealand onshore assets (-$53m)
• Impairment of IT projects with the deferral of the organisation wide IT transformation (-$50m)
• LNG related items
• Net financing costs (-$139m)
• Origin’s share of APLNG’s tax expense on translation of foreign-denominated tax balances (-$51m)
• Non-cash foreign currency losses (-$29m)
• Pre-production costs unable to be capitalised (-$23m)
• Contact related items primarily reflecting impairment of Origin’s investment (-$265m)
($ million) FY2015 FY2014 Change
Statutory (Loss) / Profit (658) 530 (1,188)
Items Excluded from Underlying Profit
Decrease in fair value of financial instruments (454) (198) (256)
Disposals, dilutions and impairments (303) 151 (454)
LNG related items (242) (192) (50)
Contact related items (278) 4 (282)
Other (63) 52 (115)
Total Items Excluded from Underlying Profit (1,340) (183) (1,157)
Underlying Profit 682 713 (31)
13
($ million) FY2015 FY2014 Change
Underlying EBITDA 2,149 2,139 10
Change in working capital (182) 163 (345)
Stay-in-business capex (306) (309) 3
Share of APLNG OCAT net of EBITDA (64) (55) (9)
Exploration expense 29 54 (25)
NSW acquisition related liabilities (18) (54) 36
Other 79 120 (41)
Tax paid (109) (17) (92)
Group OCAT 1,578 2,041 (463)
Net interest paid (382) (442) 60
Free cash flow 1,196 1,599 (403)
Productive Capital* 17,471 16,577 894
Group OCAT ratio* 8.4% 11.5% (3.1%)
Group OCAT down 23% to $1,578 million Free cash flow down 25% to $1,196 million
* Refer to Appendix for Glossary.
Net impact of carbon payments under
the Clean Energy Act 2011, which has
now been repealed
Completion of Te Mihi and Retail
Transformation at Contact Energy
Group OCAT ratio decreased from 11.5% to 8.4%
Additional interest paid on higher
average debt balances (-$174m)
more than offset by benefit from
bringing forward the positive fair
value on cross currency swaps
(+$76m) and interest income on
MRCPS issued by APLNG (+$158m)
Timing differences arising on payment
of tax instalments
14
Segment Cash Flow Returns
• Energy Markets: Lower OCFR reflecting higher underlying EBITDA and working capital improvement
more than offset by the net impact of carbon payments
• E&P: Lower OCFR from lower EBITDA and higher working capital requirements.
• Contact: Lower OCFR with higher productive capital driven by completion of Te Mihi and Retail
Transformation in the final quarter of FY2014 and lower EBITDA
Operating Cash Flow Productive Capital OCFR* (%)
FY2015
($m)
FY2014
($m)
%
Change
FY2015
($m)
FY2014
($m)
%
Change FY2015 FY2014
Energy Markets 930 1,035 (10%) 9,607 9,565 (0%) 9.7% 10.8%
Exploration & Production
348 529 (34%) 2,117 2,248 (6%) 16.4% 23.5%
Contact Energy 462 416 11% 5,368 4,689 14% 8.6% 8.9%
15 * Refer to Appendix for Glossary.
0
1,000
2,000
3,000
4,000
5,000
6,000
FY
20
16
FY
20
17
FY
20
18
FY
20
19
FY
20
20
FY
20
21
FY
20
22
FY
20
23
FY
20
24
FY
20
25
+
A$ m
illion
Origin Debt & Bank Guarantee Maturity Profile as at 30 June 2015
- Post Sale of Contact
Loans & Bank Guarantees - Undrawn
Loans & Bank Guarantees - Drawn
Capital Markets Debt & Hybrids
Following funding initiatives to extend debt maturities and improve liquidity
position Origin has $4.4 billion1 of committed and undrawn debt facilities
and cash as at 30 June 2015 ...
(1) Excludes Contact Energy and bank guarantees.
(2) Excludes Contact Energy and includes pro-forma adjustment for proceeds from the sale of Contact Energy.
Origin Debt & Bank Guarantee Pro-forma
Maturity Profile as at 30 June 20152
During the period, Origin:
• Issued €1 billion hybrid
securities hedged into
Australian dollars ($1.4 billion)
• Amended syndicated bank
loan facilities to extend
maturities by 16 months,
reduce interest rate margins by
0.30% and increase the limit
from $6.6 billion to $7.4 billion
... with an additional A$1.4 billion of liquidity from the sale of Contact on
10 August 2015
16
25 25 25 25
25 25 25 2583
70 65 62
0
25
50
75
100
125
150
ce
nts
pe
r sh
are
Dec Half dividend June Half dividend Underlying EPS
FY2012 FY2014 FY2015FY2013
25 25 25 25
25 25 25 25
130
108
145
108
0
25
50
75
100
125
150
ce
nts
pe
r sh
are
Dec Half dividend June Half dividend Free Cash Flow per share
FY2012 FY2014 FY2015FY2013
(1) Due to the impact of development projects, including APLNG, Origin does not expect to have sufficient franking credits to frank the final dividend.
* Includes 15 cps of MRCPS interest income.
Origin has kept dividends constant and utilised remaining free cash flow to
fund growth
An unfranked1 final dividend of 25 cps has been determined, representing a payout ratio of 81% of Underlying EPS
Dividends and Underlying EPS Dividends and Free Cash Flow per share
17
Origin is committed to maintaining its dividend policy of the greater of 50c per share or 60% of Underlying NPAT
*
3. OPERATIONAL REVIEW
Grant King, Managing Director
18
1,035 930
-
300
600
900
1,200
1,500
FY2014 FY2015
$m
1,053
1,260
-
300
600
900
1,200
1,500
FY2014 FY2015
$m
Underlying EBITDA up 20% to $1,260 million due to margin expansion and increased sales volumes in
Natural Gas
Underlying EBIT margin up from 8.4%1 to 9.9%
Operating cash flow down 10% to $930 million, with higher underlying EBITDA and working capital
improvement more than offset by the net impact of carbon payments
Lower cash operating costs of $36 million, or $7 per customer (Natural Gas and Electricity)
Net gain of 4,000 Electricity and Natural Gas customer accounts in H2 FY2016 resulting in a full year net
loss of 28,000 customer accounts
Grew Solar & Energy Services and expanded product offerings
Energy Markets
(1) Excluding carbon impact of 0.6%. Reported as 7.8% in the prior corresponding period.
Underlying EBITDA Operating Cash Flow
19
1,053
1,260247
0
200
400
600
800
1,000
1,200
1,400
FY2014 Natural Gas Gross
Profit
Electricity Gross Profit
LPG Solar & Energy Services
Gross Profit
Operating Costs
FY2015
$ m
illio
n
• Natural Gas Gross Profit up $247m due to:
• Expansion in Retail unit margins (+$70m)
• Higher Retail sales (+$45m)
• Ramp gas benefit from higher Business sales (+$39m)
and capacity services to LNG projects (+$38m)
• Commencement of sales to other LNG projects
(+$55m)
• Electricity Gross Profit down $48m due to:
• Retail margin compression as recovery of increased
green costs (following repeal of carbon) in tariffs
eroded by discounts (-$41m impact)
• Lower Business volumes (-$7m)
• LPG and Solar & Energy Services Gross Profit up $35m
primarily due to lower wholesale LPG supply costs
• Operating Costs up $27m due to:
• Lower Natural Gas & Electricity cash cost to serve of
$7 per customer offset by final TSA provision unwind
benefit in prior corresponding period ($6m)
• Higher LPG and Solar & Energy Services costs
supporting growth and investments in emerging
businesses and remediation costs for early model solar
PV inverters (-$33m)
Energy Markets EBITDA up $207 million to $1,260 million primarily due to margin expansion and increased sales in Natural Gas
Energy Markets Underlying EBITDA Bridge
(48) (27) 35
20
External Volumes Sold (PJ) FY2015 FY2014 Change
Retail (Consumer & SME) 41.7 37.1 4.6
Business 104.9 71.1 33.8
Total 146.6 108.2 38.4
Natural Gas Performance ($/GJ) FY2015 FY20142 Change
Retail (Consumer & SME) Revenue 23.4 21.6 1.8
Business Revenue1 7.2 7.0 0.2
Combined Revenue 11.8 12.0 (0.2)
Network Costs (4.4) (5.4) 1.0
Energy Procurement Costs1 (3.9) (4.1) 0.2
Total Cost of Goods Sold (8.3) (9.5) 1.2
Gross Profit 3.6 2.5 1.1
Gross Profit Per Customer ($) 491 268 223
Natural Gas Unit Gross Profit up 44% ($1.10/GJ) as tariffs increased in line with rising east coast market prices while energy procurement costs decreased reflecting the benefits of ramp gas
Unit Gross Profit up 44%
Gross Profit increased by $223/customer, with $101 attributed to expansion of Retail unit margin and $122 from higher Business volumes
Gross Profit per Customer up 83%
Sales volumes up 38 PJ
Lower cost of energy
Retail tariff increases
(1) Business Revenue and Energy Procurement Costs for the period ended 30 June 2014 have been restated to remove pass through TUOS charges to customers at no margin.
These revenues are netted off with the associated cost in Natural Gas cost of goods sold.
(2) Prior corresponding period restated to exclude impact of carbon for comparative purposes. 21
0
50
100
150
200
250
FY2014 FY2015 FY2014 FY2015
Sources Uses
Generation
LNG
Business
Retail
Ramp Gas
Equity
Contracted
PJ
Origin’s flexible portfolio and gas transportation arrangements have allowed
Origin to monetise available ramp gas in Queensland, preserving E&P
production for future periods
Energy Markets Sources and
Uses of Gas
-19 PJ of internal
sales from E&P
Sources Uses
+63 PJ of ramp
gas
+6 PJ into
generation
+18 PJ of C&I
and trading sales
+16 PJ of
Sales to other
LNG projects
+5 PJ of
Retail sales
22
Volumes Sold (TWh) FY2015 FY2014 Change
Retail (Consumer & SME) 17.9 18.0 (0.1)
Business 18.4 20.3 (1.9)
Total 36.3 38.3 (2.0)
Electricity Performance ($/MWh) FY2015 FY20141 Change
Retail (Consumer & SME) Revenue 274.4 265.8 8.6
Business Revenue 121.4 117.4 4.0
Combined Revenue 198.8 189.6 9.2
Network costs (103.2) (94.8) (8.4)
Wholesale energy portfolio costs (52.5) (52.7) 0.2
Generation operating costs (7.7) (7.3) (0.3)
Energy procurement costs (60.2) (60.0) (0.2)
Total Cost of Goods Sold (163.3) (154.7) (8.6)
Gross Profit 35.5 34.9 0.6
Gross Profit Per Customer ($) 457 461 (4)
Electricity unit Gross Profit per customer down $4 due to Retail margin compression
Retail margin compression more than offset by
increased proportion of higher margin Retail
volumes
Gross Profit per customer down 1% due to
Retail margin compression
Black energy procurement costs stable despite
higher market prices, with increased green costs
for Retail customers
(1) Prior corresponding period restated to exclude impact of carbon for comparative purposes.
• Retail margin compression as recovery of
increased green costs (following repeal of
carbon) in tariffs eroded by discounts
($41m impact)
• Impact of discounts as a percentage of
Retail revenue is 4.0%, up from 3.7% in the
prior year
Flat Retail volumes with return to more normal
winter weather offset by customer losses, and
moderating impact of solar and energy efficiency
Lower volumes of lower margin Business
customers
23
0
10
20
30
40
50
FY14 FY15
Gas Generation
Coal Generation
Contract or Spot Market
TWh
0
10
20
30
40
50
FY14 FY15 FY14 FY15
Pool Contract
FY2014 EnergyFY2014 VolatilityFY2015 EnergyFY2015 Volatility
$/MWh
Average Price <$300/MWh
Average Price >$300/MWh
Pool Forward contracts2
1 1
0
10
20
30
40
50
FY14 FY15 FY14 FY15
Pool Contract
FY2014 EnergyFY2014 VolatilityFY2015 EnergyFY2015 Volatility
$/MWh
0
10
20
30
40
50
FY14 FY15 FY14 FY15
Pool Contract
FY2014 EnergyFY2014 VolatilityFY2015 EnergyFY2015 Volatility
$/MWh
Origin’s black cost of energy remained stable despite an 8% increase in
forward contract prices and 13% increase in pool prices ...
(1) Adjusted for carbon.
(2) Contracts prices - AFMA, excluding carbon, based on 12 month average prior to period, straight average of states.
Average Annual NEM Prices
Origin’s Electricity Portfolio
55% of load
covered with
internal
generation
... as Origin’s portfolio delivered operational flexibility to effectively manage
pool price volatility and adapt to changing market conditions
24
Average Weighted Discount sold (POT disc+Flat disc+Rebates+OMF & All Products)
NSW VIC QLD SA
-32
4
-40
-30
-20
-10
0
10
H1 FY2015 H2 FY2015
Cu
sto
me
r A
cco
unts
('0
00
)
Origin delivered a net gain in customer accounts in the second half with the
offering of competitive discounts following first half losses amid strong
competition in VIC and increasing competition in NSW
Origin’s Average Signed Discount Offers for
Electricity and Natural Gas (%)
Electricity and Natural Gas Customer
Account Movements
• As part of Origin’s disciplined margin management strategy, discounts were reduced in July and August 2014
• As competitive activity persisted in VIC and increased in NSW, Origin experienced net customer losses
• Origin responded in November with competitive discount offers, delivering a net gain of 4,000 customer accounts
in H2 FY2015 compared to a net loss of 32,000 in H1 FY2015
VIC
NSW SA
QLD
25
Origin has continued to increase its Natural Gas penetration to benefit
from expanding Natural Gas Gross Profit per Retail customer ...
26
• Natural Gas customer accounts up 47,000
• Electricity customer accounts down 75,000
FY2014 FY2015
Electricity
Natural Gas
• Natural Gas margin per Retail customer up 55%
• Electricity margin per Retail customer flat
Electricity and Natural Gas Customer
Account Movements in FY2015
Electricity and Natural Gas Gross
Margins per Retail Customer
... and held Electricity Gross Profit per Retail customer stable despite intense
market competition
-100
-80
-60
-40
-20
0
20
40
60
Electricity Natural Gas
Operating costs FY2015 FY2014 Change
Cash cost to serve ($ per average customer account) (159) (167) 7
Cash cost to maintain ($ per average customer account) (134) (142) 8
Cash cost to acquire/retain ($ per average customer account) (26) (25) (1)
Natural Gas & Electricity cash operating costs (excl. TSA
provision unwind) ($m) (603) (639) 36
Maintenance costs ($m) (506) (542) 37
Acquisition & retention costs ($m) (98) (97) (1)
TSA provision unwind ($m) - 30 (30)
Total Natural Gas & Electricity operating costs
(incl. TSA provision unwind) ($m) (603) (609) 6
LPG operating costs ($m) (139) (127) (13)
Solar & Energy Services operating costs (42) (23) (20)
Total operating costs ($m) (785) (759) (26)
Natural Gas & Electricity cash operating costs continue to fall, by $7 per customer or 4%, reflecting improved operational efficiency and customer experience ...
TSA provision unwind benefit in
FY2014 partly offsets lower cash
operating costs
Lower cash operating costs
Higher LPG and Solar & Energy
Services operating costs
supporting growth and investments
in emerging businesses and $17m
for remediation costs for early
model solar PV inverters
... with investment in solar, metering and other energy services to provide future earnings
27
Lower cost to maintain with continued operational improvements ...
568k 972k
621k 917k
579k 683k
6.6 4.9
1.2 1.3
Jun 14 Jun 15
Customer registered on
MyAccount
Customers taking up
eBilling
Customers choosing
Direct Debit
Ombudsman complaints
(per 1,000 customers)
Calls per customer
0.6% 1.0% Bad & Doubtful Debts
(as % of Revenue)
Sales Channels Customer Wins and Retains
... while productivity improvements evident in stable acquisition and retention
costs despite a 20% increase in activity
Cost to Maintain Metrics Cost to Acquire and Retain Metrics
277182 139
1201 13641719
0
400
800
1,200
1,600
2,000
FY2013 FY2014 FY2015
Cu
sto
me
r w
ins a
nd
re
tain
s ('0
00
)
Internal External
637 538 518
841 1008
1340
0
400
800
1,200
1,600
2,000
FY2013 FY2014 FY2015
Cu
sto
me
r w
ins a
nd
re
tain
s ('0
00
)Retains Wins
183k
157k
390k
9.0
1.6
Jun 13
1.7%
28
New integrated digital capability
Dedicated sales and service centres
Simpler, shorter communications
Customer Loyalty and Trust
New payment options
Origin continues to focus on building customer loyalty and trust, leveraging digital investments, creating simpler customer interactions and offering industry-leading hardship programs
Building customer loyalty and trust is the most powerful mitigant to the impacts of a highly competitive market
New products and services
Customer centric culture
Industry-leading hardship programs
29
• Battery trials underway and
ongoing discussions with various
suppliers
• Enhancing and extending
existing Hot Water and Heating
& Cooling services
• Leader in centralised hot-water
in high-density residential
developments
• Now offering embedded energy
solutions
• ‘Solar as a Service’ launched in
May with ~700 kWs contracted
to 30 June 2015 across
Residential, SME and C&I
• SaaS establishes long term
relationships (7, 10 or 15 year)
• Origin installing large scale
commercial solar projects
(Tonsley, SA; Royal Mint, ACT)
Origin launched Solar as a Service in May, initiated battery trials and grew its established Acumen metering business ...
... and continues to expand its energy products and services and leverage data and analytics capabilities to embed longer term customer relationships
• Leveraging metering
technology and leading-edge
analytics to provide deeper
customer insights
• Over 40,000 meters installed
through Acumen Metering
• With upcoming market
changes to metering, Origin is
at the forefront of this
emerging opportunity
Solar Energy Services Customer Analytics and
Advanced Metering
30
487
399
-
200
400
600
FY2014 FY2015
$m
529
348
-
200
400
600
FY2014 FY2015
$m
Exploration & Production
Underlying EBITDA down 18% to $399 million primarily due to lower liquids production as Energy Markets
took advantage of available ramp gas in QLD, preserving gas and associated liquids production for future
periods, combined with lower liquids prices
Operating cash flow down 34% to $348 million reflecting lower Underlying EBITDA and higher working
capital requirements
Successful lift of condensate and compressor modules onto the Yolla platform at BassGas and the drilling of
Yolla 5 and 6 production wells
Successful drilling at Halladale and Speculant in the Otway Basin and at Senecio, Waitsia and Irwin in the
Perth Basin
Underlying EBITDA Operating Cash Flow
31
20 17
76
65
0
20
40
60
80
100
120
FY2014 FY2015
Natural Gas & Ethane
Liquids
PJe
E&P EBITDA down $88 million to $399 million primarily due to lower liquids
production and prices
E&P EBITDA Bridge1
(1) Liquids production includes crude, condensate, LPG and hedges.
(2) Excludes APLNG.
Gas and Liquids Production2
Lower gas
volumes offset by
higher gas price
(+$5m)
Lower liquids
volumes and
prices (-$108m)
487399
37 (32)(54)
(54)25 2 (13)
0
100
200
300
400
500
600
(+$5m) (-$108m)
32
New discoveries in the Otway and Perth basins provide development opportunities and partly offset a decrease in 2P reserves
New bookings in 2P reserves of 66 PJe
• 49 PJe Speculant discovery in the Otway
Basin which is being developed in
conjunction with Halladale (2P reserves of
33 PJe booked in FY2014)
• 16 PJe initial Waitsia / Senecio discovery
in the Perth Basin with gas expected to be
tied in to existing facilities
• The Waitsia / Senecio discovery has
significant conventional and tight gas
potential and Origin is working closely with
AWE to appraise this discovery
Revisions in 2P reserves of 80 PJe
• 32 PJe downward revision at BassGas
following results of the Yolla 5 and 6 drilling
campaign
• 27 PJe downward revision of the
Geographe field in the Otway Basin due to
lower than expected reservoir performance
• 15 PJe downward revision relating to
revised field development plans in the
Cooper Basin
1,1891,093
66
0
200
400
600
800
1,000
1,200
1,400
FY2014 Production New
Bookings
Revisions/
Extensions
FY2015
PJe
PJe
(82) (80)
E&P 2P Reserves Bridge1
33 (1) Refer to Important Information in the Appendix.
The Yolla 5 and 6 development wells were successfully drilled and
connected as part of Stage 2 of the Mid Life Enhancement Project ...
Stage 1 - completed in October 2012
• Accommodation module installed
• Safety and utility systems upgraded
• Compression and condensate modules
Stage 2 – completed in August 2015
• Lifting of compression and condensate modules in December 2014
• Yolla 5 and 6 development wells drilled between March and July
2015 using the West Telesto jack up rig and brought online in July
and August 2015, resulting in increased production
• Installation of the compression and condensate modules is
expected in first half of FY2018
... increasing production from BassGas into growing gas demand in eastern Australia
Lang Lang
onshore gas
processing
facility
Yolla
offshore
platform
Sapura 2000 heavy lift vessel with compressor module West Telesto floating off the heavy lift vessel West Telesto cantilevered over the Yolla platform
34
83
72
-
25
50
75
100
FY2014 FY2015
$m
LNG
APLNG project nearing completion
• Upstream 97% complete
• Downstream 92% complete
Sustained LNG production from Train 1 expected from Q2 FY2016 and from Train 2 approximately 6
months later
Estimated project costs to complete not expected to be materially different from budget1
Underlying EBITDA
(1) As announced in February 2013, based on December 2012 exchange rates.
35
Upstream Project Progress - 97% complete and on track
Upstream Operated Goals FY2015
Plan Actual Progress
Eurombah Creek GPF Train 1 mechanical completion Q3 Accomplished
Condabri North GPF Train 2 mechanical completion Q3 Accomplished
950 wells commissioned Q4 Accomplished
Spring Gully pipeline compression facility mechanical completion Q4 Accomplished
Eurombah Creek GPF Train 2 mechanical completion Q1 FY16 Accomplished in Q4 FY15
Permanent power from grid connected to all GPF sites Q1 FY16 Accomplished
Combabula GPF Train 3 mechanical completion Q2 FY16 Accomplished in Q1 FY16
Condabri North Gas Processing Facility Eurombah Creek Gas Processing Facility Combabula Gas Processing Facility
Of the 15 gas processing trains, 12 are now commissioned and 3 are mechanically complete and
undergoing commissioning
36
-
5,000
10,000
15,000
20,000
Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
Despite a modest reduction in reserves, APLNG continues to have more
than sufficient reserves to support domestic and LNG contracts
• 1P reserves up 32% PJe to 6,059 PJe
(including production) due to development
drilling
• 2P reserves down 2% to 13,778 PJe
(including production) predominantly due to
lower oil price assumptions
• 3P reserves down 7% to 16,174 PJe
(including production) predominantly due to
re-classification of low permeability 3P
reserves to 2C contingent resources
• Future exploration and appraisal activity will
target contingent and prospective resources
with upside over coming years, including from
new plays (Reids Dome, Peat Flank)
(1) Refer to Important Information in the Appendix.
(2) Represents ramp and tail gas for two trains, volume will vary depending on operational strategy.
100% APLNG Reserves 1
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
-
5,000
10,000
15,000
20,000
Ramp and Tail Gas Train 2 Train 1
QCLNG GSA Domestic Gas Origin Contract
3P 2P 1P
Estimated
Requirements
2
PJ
37
-
1.0
2.0
3.0
Q3 FY14
Q4 FY14
Q1 FY15
Q2 FY15
Q3 FY15
Q4 FY15
Talinga
Condabri
Orana
Spring Gully
Combabula / Reedy Creek
TJ/d
2.3
2.1
0.9
0.8
0.5
Operated well deliverability is nearing gas requirements for Train 1, with
production turned down to meet market demand and wells operationally
cycled to maintain confidence in deliverability
Average Maximum Well Deliverability
(AMWD) Orana
• Outperformed FID expectations
• Growing strongly as initial
dewatering takes effect
Condabri / Spring Gully
• Total capacity continues to grow
• AMWD stable as new wells coming
online offset capacity growth of
earlier wells
Combabula / Reedy Creek
• As anticipated, not as productive
as Orana
• Continues to ramp up as
dewatering continues
(1) Excludes non-operated supply from QGC’s 620/648 fields during FY2016, all of which has been sold to QGC 38
Downstream Project Progress - 92% complete and on track
Downstream Operated Goals FY2015 Plan Actual Progress
Energise Gas Turbine Generators Q3 Accomplished
Introduction of first gas to the facility Q3 Accomplished
First fire of Gas Turbine Generators Q3 Accomplished in April
Commence Train 1 refrigerant loading Q4 Accomplished in July
LNG Tanks mechanical completion Q4 Accomplished
OCTOBER 2012 JULY 2015
39
APLNG capital expenditure for the period was $6 billion, with Origin’s cash
contribution $2.2 billion
(1) APLNG capital expenditure (100%) derived from APLNG’s Financial Statements; on an accruals basis.
(2) Includes an unfavourable foreign exchange translation impact of A$362 million relative to project cost estimates announced in February 2013, which were based on 31 December
2012 exchange rates, and around $500 million of accrued expenses.
(3) As announced in February 2013, based on December 2012 exchange rates.
(4) Via both loan repayments to APLNG and the issue of Mandatorily Redeemable Cumulative Preference Shares by APLNG to Origin, net of MRCPS interest income.
Estimated costs to complete are not
expected to be materially different from
budget 3
(A$m) Year to 30
June 2015
Cumulative
from FID1 to 30
June 2015
Project Capex 1 3,959 24,9632
Non-Project Capex:
Capitalised O&M 679
Domestic 516
Exploration 132
Sustain 726
Total APLNG Capex 6,012
Origin cash contribution 4 2,166 6,708
40
The project is nearing completion with achievement of Train 1 LNG production milestones expected in Q2 FY2016
Key Goals and Milestones FY2016 Plan
First Cargo from Train 1 Q2
Commencement of Sinopec SPA Q2
Completion of Bechtel Performance Test Train 1 (Bechtel Performance Date) Q3
First Cargo from Train 2 Q4
41
Corporate
Underlying EBITDA down $52 million reflecting higher corporate costs and lower cost recoveries from
APLNG
Increased investment in Energia Andina by 9.9% to 49.9% to fund the acquisition of a 40% stake in the
69MW Javiera solar project in Northern Chile
Acquired a 280 MW solar development opportunity in northern Chile for US$1 million
(17)
(69)
(80)
(60)
(40)
(20)
-
20
FY2014 FY2015
$mUnderlying EBITDA
42
4. PROSPECTS
Grant King, Managing Director
43
0
100
200
300
400
500 Contracted Supply
Contracted Atlantic Supply
Contracted US Supply
Total LNG Demand
mtmt
Incremental Australian gas production
utilising spare train capacity expected to
compete against US LNG as marginal
supplier in the long term
Current Asian spot prices are
around US$8/mmbtu, or
A$11/mmbtu3
Global Contracted LNG 2
Supply / Demand
(1) Monthly average of Argus northeast Asia (ANEA) LNG spot price and ICIS LNG East Asia Index
(2) WoodMackenzie LNG Tool, Q2 2015
(3) At current exchange rates
Even at low oil prices, LNG pricing is still attractive, particularly for incremental LNG production ...
... driving increased demand for east coast gas and Origin’s development projects at Halladale / Speculant and Ironbark
Curtis Island Supply
• Once Queensland LNG projects
are online, spare uncontracted
capacity may provide
opportunities for additional LNG
sales
• APLNG has contracted 8.6 mtpa
of 9 mtpa nameplate capacity,
with potential upside above
nameplate capacity
• If this potential applies across all
three projects on Curtis Island,
east coast gas demand could
further increase
LNG Pricing1
44
0
30
60
90
120
150
180
0
5
10
15
20
25
30
7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8
2013 2014 2015
US$/mmbtu US$/bbl
Brent - RHS
Asian Spot LNG - LHS
0
30
60
90
120
150
180
0
5
10
15
20
25
30
7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8
2013 2014 2015
US$/mmbtu US$/bbl
Diversion of gas from generation to the LNG market contributes to a short term tightening of the electricity market ...
NEM Gas-Fired Generation1
(1) AEMO data and Origin modelling
(2) Origin modelling
Required Renewable Build To Meet
33 TWh RET2
... however an additional 14 TWh of renewable build in the NEM is required to meet the recently agreed 33 TWh renewable energy target, with potential for further renewable requirement to meet the newly announced carbon emission target
Australia’s Post 2020
Carbon Emission Target
• Renewable energy likely to
increase above current 33 TWh
target following recently
announced 26-28% carbon
emissions reduction target on
2005 levels by 2030
• A 50% renewable target by 2030
(equating to approximately 125
TWh of renewable energy)
would deliver less than half of
the announced carbon emissions
reduction target
• 15 TWh of gas generation
expected to be withdrawn
between FY2015 and FY2017
45
• 14 TWh of large scale renewable
build required in the NEM
• A further 14 TWh of solar PV
expected to be installed by 2030
-
5
10
15
20
25
NSW QLD SA VIC
0
5
10
15
20
25
30
35
Renewables Build Equivalent Required
TWh
Existing New Build
TWh TWh
The certainty provided by the setting of the new 33 TWh target has led to an increase in LREC prices, with any upward pressure towards penalty price further incentivising new build ...
... while utility scale solar is becoming increasingly cost competitive against wind
Black, LREC and Penalty Prices1
• Increasing range of wind
costs reflecting declining
capacity factors as
premium wind sites are
built out first
• Decreasing range of solar
costs reflecting various
technology types
• DA approved wind
projects take 1-2 years to
FID, and 1-3 years to build
• Utility scale solar has a
shorter development
timeframe
Levelised Cost of Wind and Solar2
(1) Black price - historical is average NSW pool prices, forward is current ICAP forward NSW price. LREC price – historical is spot price, forward is current forward ICAP LREC curve.
(2) Origin modelling
46
• LREC price fluctuates with black price to provide required subsidy for wind and solar development
• Current LREC price plus black price is approaching the levelised cost of wind and solar
• Implied penalty price of $96 per certificate incentivises new build to meet the 33 TWh target
0
20
40
60
80
100
120
140
160
Renewable LCOE
$/MWh
Solar Costs
Wind Costs
$/MWh
0
20
40
60
80
100
120
140
160Black
LREC
$/MWh
Black plus
penalty
Retail
Business
Coal
Gas
Pool or Contract Market
0
5
10
15
20
25
30
35
40
Demand Supply
En
erg
y (
TW
h)
TWh
Origin’s flexible portfolio provides an opportunity for Origin to benefit from increasing intermittency of generation as more renewables are built, as well as participate in meeting the target
(1) REC liability based on growth in line with AEMO’s system demand
Origin’s Energy Portfolio (FY2015) Origin’s LRET position1
• Origin’s REC inventory covers its Mass Market REC liability until
around 2020, providing flexibility around timing of investment
decisions on renewable build
• Alternatively Origin could acquit and monetise its REC inventory
against its Total REC liability, and build into the RET sooner
• Origin’s short generation position provides
the opportunity to develop renewable
generation
47
-
1
2
3
4
5
6
7
8
Nu
mb
er o
f L
RE
Cs (m
illio
ns)
ORG LRET position - 33 TWh
ORG existing PPAs and contracts ORG call options (non-firm)Use of REC inventory ORG Stockyard Hill OptionMass Market REC liability ORG Total REC liability
Origin also has flexibility around timing of any investment or monetisation decisions
... while E&P growth capital expenditure will continue to be limited to development projects that increase gas production into growing gas demand
Growth and SIB Capital Expenditure and Cash
Contribution to APLNG1,2
(1) Forward looking numbers are based on management’s estimates of expenditure (committed and highly likely to proceed). All numbers exclude capitalised interest. Forward
looking SIB and Growth capex does not include Contact.
(2) Forward looking APLNG numbers represent Origin’s expected cash contributions (net of MRCPS interest income), rather than Origin’s share of total APLNG capital expenditure;
based on Origin’s shareholding in APLNG of 37.5%.
• Origin’s remaining contribution to APLNG from 1 July
2015 is estimated to be around $1.8b2, an increase of
$550m from guidance provided at HY2015 results
• Approximately $300m from lower oil prices and
impact of previously advised change in expected
commencement of sustained production from Train
1 from Q1 FY2016 to Q2
• $250m due to potential funding of sustain phase
expenditure, previously assumed to be deferred, to
take advantage of additional LNG production
capacity that APLNG is anticipated to have
• Origin will maintain stay in business capital expenditure
to ensure the competitiveness of the business
• Growth capital expenditure in the existing businesses
(excluding acquisitions) to reduce to around $650m
Origin’s remaining contribution to APLNG is expected to be approximately $1.8 billion ...
48
0
1,000
2,000
3,000
4,000
5,000
FY2014 FY2015 FY2016
(Est)
FY2017
(Est)
$ m
illio
n
SIB capex Energy Markets
Contact Corporate
E&P Poseidon Acquisition
APLNG
Initiatives have already been announced to reduce cash costs of operations in Integrated Gas and Energy Markets
A new initiative has been established to reduce cash costs of functional activity across Origin by $200 million per annum from FY2017
49
Integrated Gas
• Implemented initiatives to reduce
APLNG’s total annual costs by
approximately $650m from Phase
1 levels, with initiatives to deliver a
further $350m of annual savings
targeted to be implemented by the
end of FY2016
• On target to achieve FY2017
steady state costs as previously
announced
Energy Markets
• Energy Markets is targeting a
further $65m reduction in cost to
serve and generation opex and
$50 million reduction in capital
expenditure in FY2016
• Opportunity to stop activity, reduce
demand, simplify work, devolve
responsibility to businesses as
project activity reduces and
operational efficiency improves
• Targeting a reduction of
approximately 800 jobs by
FY2017
• Redundancy and restructuring
costs are expected to largely
offset FY2016 savings
• Large scale investment in systems
deferred
Controllable cost base
managed by Origin is split
approximately evenly
between operational and
functional activity
OPERATIONAL COSTS FUNCTIONAL COSTS
• Similar contribution from Energy Markets in FY2016 to that achieved in FY2015
• Ramp gas benefits largely replaced with increasing natural gas sales to LNG projects
• Impact of intense competition in retail markets expected to continue
• Focus on building customer loyalty and trust, reducing Electricity & Natural Gas operating costs and investing in
growing new solar and energy services
• Contact contribution ceases and interest savings on debt reduction from sale proceeds commence from 10 August
• Contribution from Integrated Gas to reflect
• Increased production from Yolla 5 and 6 at BassGas more than offset by decreased production from Otway and
Kupe due to scheduled maintenance shutdowns and Otway field decline
• Earnings from most of the oil and condensate production will not be impacted by movements in oil price and will
reflect the fixed price of US$62.40/bbl, however cash flow from sale of liquids will be lower as proceeds of the
forward sale agreement were received in FY2013
• APLNG will sell to QGC its entire share of production from the ATP620/648 fields. The price reflects linkage to oil
prices and a fixed component which allows QGC to recover a return on capital invested in its export project. The
fall in oil prices has resulted in a significant reduction in revenue under this agreement
• Contribution to earnings from sale of LNG to commence in second half of the year
• Earnings from sale of LNG to be more than offset by disproportionate recognition of depreciation and interest expense
during ramp up to full production
• Corporate segment to recognise lower cost recoveries from APLNG under the corporate service provider agreement
• A company-wide project to deliver a reduction of $200m pa in cash costs from FY2017. Cost savings achieved in
FY2016 expected to be largely offset by restructuring costs
50
FY2016 is a transitional year for Origin as APLNG begins LNG production, in which Origin expects ...
Brent Forward and Spot Curves (A$/bbl)1
APLNG will continue its endeavours to reduce the oil price at which APLNG is
able to distribute cash
(1) Bloomberg
0
20
40
60
80
100
120
140AUD Brent Price
FY17 Spot
FID 1 FID 2
APLNG will have free cash flow available for distribution to its shareholders
at approximately A$55/bbl oil on average from FY2017
51
APLNG will have free cash flow
available for distribution at A$55/bbl
oil, which is after all costs including
principal repayment and interest on
project finance, and steady state
operating and capital costs
Every A$10/bbl movement results
in approximately A$200 million
change in expected distributable
cash flow from APLNG to Origin
Excess funding capacity for committed
capital and funding needs, not
dependant on oil price recovery
• Extended debt maturities
• Divested Contact
• No need to raise equity to fund
APLNG
LIQUIDITY SERVICEABILITY FLEXIBILITY
Initiatives to improve flexibility
• Divested Contact
• Energy Markets $100m reduction in
operating costs by end of FY2016,
with $35m achieved in FY2015,
and $50m reduction in capex
• $1b pa reduction in APLNG’s
upstream cost structure
• $200m pa functional cost reduction
• Asset portfolio optimisation
• Assessing option to increase debt
level in APLNG
Restored flexibility allows
• De-lever more quickly
• Increase dividends
• Take advantage of growth
opportunities
-
500
1,000
1,500
2,000
2,500
3,000
FY2013 FY2014 FY2015 FY2015
A$
millio
n
Dividends paidInterest paid (ex MRCPS int rec)SIB CapexCash Flow from Operations
(1) Excludes Contact Energy and includes pro-forma adjustment for proceeds from the sale of Contact Energy.
0
1,000
2,000
3,000
4,000
5,000
6,000
FY
2016
FY
2017
FY
2018
FY
2019
FY
2020
FY
2021
FY
2022
FY
2023
FY
2024
FY
2025+
A$
millio
n
Origin Debt & Bank Guarantee Maturity Profile as at 30 June 2015
- Post Sale of Contact
Loans & Bank Guarantees - Undrawn
Loans & Bank Guarantees - Drawn
Capital Markets Debt & Hybrids
52
Origin Debt & Bank Guarantee Pro-forma
Maturity Profile as at 30 June 20151
Cash Flow Sources and Uses
(ex Growth Capex)
Origin is focused on initiatives to increase cash flow, reduce debt and improve flexibility
Cash flow from existing businesses
services all debt, SIB capex and
dividends, and not dependant on oil
price recovery
Origin’s liquidity and debt service capability is robust and not dependant on oil price recovery
5. APPENDIX
53
Continuing and Discontinued Operations
(1) Does not include the expected interest savings relating to the reduction in Origin’s debt from proceeds received on the sale of Contact.
(2) A breakdown of Items excluded from Underlying Profit is provided on slide 13.
($ million)
Continuing Discontinued / Contact Total
FY2015 FY2014 FY2015 FY2014 FY2015 FY2014
External Revenue 11,550 12,363 2,254 2,155 13,804 14,518
Underlying EBITDA 1,662 1,606 487 533 2,149 2,139
Underlying depreciation and amortisation (618) (560) (189) (172) (807) (732)
Underlying share of interest, tax, depreciation and
amortisation of equity accounted investees (62) (54) 0 0 (62) (54)
Underlying EBIT 982 992 298 361 1,280 1,353
Underlying net financing cost (78)1 (119) (91) (73) (169) (192)
Underlying income tax expense (291) (258) (58) (84) (349) (342)
Non-controlling interests’ (10) (10) (70) (96) (80) (106)
Underlying Profit2 603 605 79 108 682 713
Underlying EPS 54.5 cps 55.0 cps 7.2 cps 9.8 cps 61.7 cps 64.8 cps
Items excluded from Underlying Profit (1,062) (187) (278) 4 (1,340) (183)
Statutory (Loss) / Profit (459) 418 (199) 112 (658) 530
Statutory EPS (41.5 cps) 38.0 cps (18.0 cps) 10.1 cps (59.5 cps) 48.1 cps
54
Continuing Discontinued / Contact Total
($ million) FY2015 FY2014 FY2015 FY2014 FY2015 FY2014
Group Operating Cash Flow 1,225 1,642 462 416 1,687 2,058
Tax paid (68) 31 (41) (48) (109) (17)
Group OCAT 1,157 1,673 421 368 1,578 2,041
Net interest paid (300) (345) (82) (97) (382) (442)
Free cash flow 857 1,328 339 271 1,196 1,599
Free cash flow per share 77.2 cps 120.3 cps 30.6 cps 24.6 cps 107.8 cps 144.9 cps
Productive Capital excluding tax balances 12,897 12,597 5,368 4,689 18,265 17,286
Productive Capital 12,810 12,558 4,661 4,019 17,471 16,577
Group OCAT ratio 8.3% 12.5% 8.5% 8.4% 8.4% 11.5%
Capital Expenditure 1,767 784 119 228 1,886 1,012
Net debt1 11,726 7,9432 1,547 1,1912 13,273 9,1342
Proforma net debt3 10,297 n/a
Continuing and Discontinued Operations
(1) On 10 August 2015, Origin divested of its entire 53.09% interest in Contact Energy and used the proceeds to repay A$1.4 billion of debt and will redeem NZ$200 million of
redeemable preference shares. Origin’s net debt at 30 June 2015, adjusted for the deconsolidation of Contact and the repaymen t of $1.4 billion of debt is $10,297 million
compared to the reported consolidated net debt of $13,273 million.
(2) The FY2014 net debt amounts are shown for illustrative purposes only
(3) Excludes Contact Energy and includes pro-forma adjustment for proceeds from the sale of Contact Energy
55
Important Information
All figures in this report relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited
and its controlled entities, for the year ended 30 June 2015 (the period) compared with the year ended 30 June 2014 (the prior corresponding
period), except where otherwise stated.
Origin’s Financial Statements for the year ended 30 June 2015 are presented in accordance with Australian Accounting Standards. The
Segment results, which are used to measure segment performance, are disclosed in note A1 of the Financial Statements and are disclosed on
a basis consistent with the information provided internally to the Managing Director. Origin’s Statutory Profit contains a number of items that
when excluded provide a different perspective on the financial and operational performance of the business. Income Statement amounts
presented on an underlying basis such as Underlying Consolidated Profit, are non-IFRS financial measures, and exclude the impact of these
items consistent with the manner in which the Managing Director reviews the financial and operating performance of the business. Each
underlying measure disclosed has been adjusted to remove the impact of these items on a consistent basis. A reconciliation and description of
the items that contribute to the difference between Statutory Profit and Underlying Consolidated Profit is provided in slide 13.
This report also includes certain other non-IFRS financial measures. These non-IFRS financial measures are used internally by management to
assess the performance of Origin’s business and make decisions on allocation of resources. Further information regarding the non-IFRS
financial measures and other key terms used in this presentation is included in this Appendix. Non-IFRS measures have not been subject to
audit or review.
Certain comparative amounts from the prior corresponding period have been re-presented to conform to the current period’s presentation.
A reference to Contact Energy is a reference to Origin’s controlled entity (53.09% ownership) Contact Energy Limited in New Zealand. In
accordance with Australian Accounting Standards, Origin consolidates Contact Energy within its result. On 10 August 2015, Origin divested its
entire 53.09% interest in Contact Energy. Contact has been classified as held for sale in the balance sheet at 30 June 2015 and, as a
consequence, has been presented as a discontinued operation in the income statement. This investor presentation provides a discussion of the
performance and operations of all of Origin’s businesses during the 2015 financial year, including Contact.
A reference to Australia Pacific LNG or APLNG is a reference to Australia Pacific LNG Pty Limited in which Origin holds a 37.5% shareholding.
Origin’s shareholding in Australia Pacific LNG is equity accounted.
A reference to $ is a reference to Australian dollars unless specifically marked otherwise.
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All references to debt are a reference to interest bearing debt only.
Individual items and totals are rounded to the nearest appropriate number or decimal. Some totals may not add down the page due to
rounding of individual components.
When calculating a percentage change, a positive or negative percentage change denotes the mathematical movement in the underlying
metric, rather than a positive or a detrimental impact.
Measures for which the numbers change from negative to positive, or vice versa, are labelled as not applicable.
Origin and APLNG’s reserves and resources are as at 30 June 2015. These reserves and resources were announced on 31 July 2015 in
Origin’s Annual Reserves Report for the year ended 30 June 2015 (Annual Reserves Report). Origin confirms that it is not aware of any
new information or data that materially affects the information included in the Annual Reserves Report and that all the material assumptions
and technical parameters underpinning the estimates in the Annual Reserves Report continue to apply and have not materially changed.
Petroleum reserves and contingent resources are typically prepared by deterministic methods with support from probabilistic methods.
Petroleum reserves and contingent resources are aggregated by arithmetic summation by category and as a result, proved reserves (1P
reserves) may be a conservative estimate due to the portfolio effects of the arithmetic summation. Proved plus probable plus possible (3P
reserves) may be an optimistic estimate due to the same aforementioned reasons.
Some of Australia Pacific LNG CSG reserves and resources are subject to reversionary rights to transfer back to Tri-Star a 45% interest in
Australia Pacific LNG’s share of those CSG interests that were acquired from Tri-Star in 2002 if certain conditions are met. Approximately
22% of Australia Pacific LNG’s 3P CSG reserves as of 30 June 2015 are subject to the reversionary rights. If reversion occurs this may
mean that the uncommitted reserves that are subject to reversion are not available for Australia Pacific LNG to sell or use after the date of
reversion. Origin has assessed the potential impact of reversionary rights associated with such interests based on economic tests
consistent with these reserves and resources and based on that assessment does not consider that reversion will impact the reserves and
resources quoted in the Annual Reserves Report. In October 2014, Tri-Star filed proceedings against Australia Pacific LNG claiming that
reversion has occurred. Australia Pacific LNG will defend the claim.
Important Information
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Glossary - Statutory Financial Measures
Term Meaning
Net Debt Total current and non-current interest bearing liabilities only less cash and cash equivalents.
Non-controlling interest Economic interest in a controlled entity of the consolidated entity that is not held by the Parent entity or a controlled entity of the
consolidated entity.
Shareholders’ Equity Shareholders’ residual interest in the assets of the consolidated entity after deducting all liabilities, including non-controlling interests.
Statutory EBIT Earnings before interest and tax (EBIT) as calculated from the Origin Consolidated Financial Statements, including EBIT of discontinued
operations.
Statutory EBITDA Earnings before interest, tax, depreciation and amortisation (EBITDA) as calculated from the Origin Consolidated Financial Statements,
including EBITDA of discontinued operations.
Statutory effective tax rate Statutory income tax expense divided by Statutory Profit before tax.
Statutory EPS Statutory profit divided by weighted average number of shares.
Statutory income tax expense Income tax expense as disclosed in the Income Statement of the Origin Consolidated Financial Statements, including income tax of
discontinued operations.
Statutory net financing costs Interest expense net of interest income as disclosed in the Origin Consolidated Financial Statements, including net financing costs of
discontinued operations.
Statutory Profit/Loss Net profit/loss after tax and non-controlling interests as disclosed in the Income Statement of the Origin Consolidated Financial
Statements.
Statutory profit before tax Profit before tax as disclosed in the Income Statement of the Origin Consolidated Financial Statements.
Statutory share of ITDA The consolidated entity’s share of interest, tax, depreciation and amortisation (ITDA) of equity accounted investees as disclosed in the
Origin Consolidated Financial Statements.
Statutory Financial Measures are measures included in the Financial Statements for the Origin Consolidated Group, which are measured and
disclosed in accordance with applicable Australian Accounting Standards. Statutory Financial Measures also include measures that have been
directly calculated from, or disaggregated directly from financial information included in the Financial Statements for the Origin Consolidated
Group.
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Glossary - Non-IFRS Financial Measures
Term Meaning
Adjusted Net Debt Net Debt adjusted to remove fair value adjustments on borrowings in hedge relationships.
Free cash flow Cash available to fund distributions to shareholders and growth capital expenditure.
Free cash flow per share Free cash flow divided by the closing number of shares on issue.
Gearing Ratio Net Debt divided by Net Debt plus Shareholders’ Equity.
Gross Margin Gross profit divided by Revenue.
Gross Profit Revenue less cost of goods sold.
Group OCAT Group Operating cash flow after tax (OCAT) of the consolidated entity (including Origin’s share of Australia Pacific LNG OCAT).
Group OCAT ratio (Calendar year Group OCAT - interest tax shield) / Productive Capital.
Interest tax shield The tax deduction for interest paid.
Operating cash flow Operating cash flow before tax.
Operating cash flow return (OCFR) Operating cash flow / Productive Capital excluding tax balances.
Prior corresponding period Twelve month period to 30 June 2014.
Productive Capital Funds employed including Origin’s share of Australia Pacific LNG and excluding capital works in progress for projects under development
which are not yet contributing to earnings. Calculated on a rolling 12 month basis.
Share of ITDA Share of interest, tax, depreciation and amortisation (ITDA) of equity accounted investees
Total Segment Revenue Total revenue for the Energy Markets, Exploration & Production, LNG, Contact Energy and Corporate segments, including inter-segment
sales, as disclosed in note A1 of the Origin Consolidated Financial Statements.
TRIFR Total Recordable Incident Frequency Rate
Underlying average interest rate Underlying interest expense for the current period divided by Origin’s average drawn debt during the year (excluding funding related to
Australia Pacific LNG).
Underlying profit and loss measures:
‐ Profit/Segment Result
‐ Depreciation and Amortisation
‐ EBIT
‐ EBIT margin
‐ EBITDA
‐ Effective tax rate
‐ EPS
‐ Income tax expense / benefit
‐ Net financing costs/income
‐ Non-controlling interests
‐ Profit before tax
‐ Revenue
‐ Share of ITDA
Underlying measures are measures used internally by management to assess the profitability of the Origin business. The Underlying profit
and loss measures are derived from the equivalent Statutory profit measures disclosed in the Consolidated Financial Statements and
exclude the impact of certain items that do not align with the manner in which the Managing Director reviews the financial and operating
performance of the business. Underlying EBIT, Underlying EBITDA, Segment Result and Underlying Profit are disclosed in note A1 of the
Origin Consolidated Financial Statements. Underlying EPS is disclosed in note A5 of the Origin Consolidated Financial Statements.
Non-IFRS Financial measures are defined as financial measures that are presented other than in accordance with all relevant Accounting
Standards. Non-IFRS Financial measures are used internally by management to assess the performance of Origin’s business, and to make
decisions on allocation of resources.
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Glossary - Non-Financial Terms
Term Meaning
1P reserves Proved Reserves are those reserves which analysis of geological and engineering data can be estimated with reasonable certainty to be
commercially recoverable. There should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate.
2P reserves
The sum of Proved plus Probable Reserves. Probable Reserves are those additional reserves which analysis of geological and engineering data
indicate are less likely to be recovered than Proved Reserves but more certain than Possible Reserves. There should be at least a 50% probability
that the quantities actually recovered will equal or exceed the best estimate of Proved Plus Probable Reserves (2P).
3P reserves
Proved plus Probable plus Possible Reserves. Possible Reserves are those additional Reserves which analysis of geological and engineering data
suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have at least a 10%
probability of exceeding the sum of Proved plus Probable plus Possible (3P), which is equivalent to the high estimate scenario.
2C resources
The best estimate quantity of petroleum estimated to be potentially recoverable from known accumulations by application of development oil and gas
projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. The total quantities ultimately
recovered from the project have at least a 50% probability to equal or exceed the best estimate for 2C contingent resources.
Capacity factor A generation plant’s output over a period compared with the expected maximum output from the plant in the period based on 100% availability at the
manufacturer’s operating specifications.
Discounting
For Energy Markets, discounting refers to offers made to customers at a reduced price to the published tariffs. While a customer bill comprises a
fixed and a variable component, Origin’s discounts only apply to the variable portion. In some cases, these discounts are conditional, such as
requiring direct debit payment or on-time payment.
Equivalent reliability factor Equivalent reliability factor is the availability of the plant after scheduled outages.
GJ Gigajoule = 109 joules
GJe Gigajoules equivalent = 10-6 PJe
Joule Primary measure of energy in the metric system.
kT kilo tonnes = 1,000 tonnes
kW Kilowatt = 103 watts
kWh Kilowatt hour = standard unit of electrical energy representing consumption of one kilowatt over one hour.
MW Megawatt = 106 watts
MWh Megawatt hour = 103 kilowatt hours
Oil Sale Agreement Agreements to sell a portion of future oil and condensate production from July 2015 for 72 months at prices linked to the oil forward pricing curve at
the agreement date
PJ Petajoule = 1015 joules
PJe
Petajoules equivalent = an energy measurement Origin uses to represent the equivalent energy in different products so the amount of energy
contained in these products can be compared. The factors used by Origin to convert to PJe are: 1 million barrels crude oil = 5.8 PJe; 1 million
barrels condensate = 5.4 PJe; 1 million tonnes LPG = 49.3 PJe; 1 TWh of electricity = 3.6 PJe.
Ramp Gas Short term Queensland gas supply as upstream assets associated with CSG-to-LNG projects gradually increase production in advance of first LNG
TW Terawatt = 1012 watts
TWh Terawatt hour = 109 kilowatt hours
Watt A measure of power when a one ampere of current flows under one volt of pressure.
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THANK YOU
For more information
Chau Le
Group Manager, Investor Relations
Email: chau.le@originenergy.com.au
Office: +61 2 9375 5816
Mobile: + 61 467 799 642
www.originenergy.com.au
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